PropertyDivision

[joannp]

What is the name of your state (only U.S. law)? NjMy question is when is equity determined? The marital home was court ordered to be on the market 8/08 but my husband didn't list until the end of Mar.09. Now with 4 reductions in price and no bites,no offer of a settlement. He's had advantage of the home for 15mos. now and its in his name only. There is equity but as it drags out there will be 3 more $12,000 reductions before an early settlment conference. The only other assest in our 25 yo marriage is a business. My husband has been defying orders and my attorney has let time lapse. What is my recourse,please don't tell me to go see another lawyer as this one has sucked me dry!

[mistoffolees]

Originally Posted by joannp

What is the name of your state (only U.S. law)? NjMy question is when is equity determined? The marital home was court ordered to be on the market 8/08 but my husband didn't list until the end of Mar.09. Now with 4 reductions in price and no bites,no offer of a settlement. He's had advantage of the home for 15mos. now and its in his name only. There is equity but as it drags out there will be 3 more $12,000 reductions before an early settlment conference. The only other assest in our 25 yo marriage is a business. My husband has been defying orders and my attorney has let time lapse. What is my recourse,please don't tell me to go see another lawyer as this one has sucked me dry!

OK. Don't go see another lawyer. Let your husband continue to walk all over you.

If, OTOH, you really ARE serious about resolving it, see an attorney and have him file to have your husband found in contempt AND pay your legal expense if he is defying court orders.

As for the house, equity is the difference between what it is worth and what is owed. Marital equity is the portion of the total equity which accrued during the marriage. What I would do is hire a professional appraiser (not a realtor) to give a formal, written appraisal and use that as the basis of equity. Ask your stbx for 1/2 of that value to be written into the agreement. The alternative is to leave it open, in which case you'll never know what you might get and you're at his mercy to sell the place.

The fact that he has use of the home doesn't change things much. I am assuming that he's responsible for the upkeep on the home? If so, he's paying for use of the home. IF you were ordered to leave by the court (rather than leaving voluntarily), you could argue that he should be paying all the expenses, but it's probably a little late for that argument. Furthermore, that argument would open you up for him to claim that he should get more of the equity.

[nextwife]

Originally Posted by mistoffolees

OK. Don't go see another lawyer. Let your husband continue to walk all over you.

If, OTOH, you really ARE serious about resolving it, see an attorney and have him file to have your husband found in contempt AND pay your legal expense if he is defying court orders.

As for the house, equity is the difference between what it is worth and what is owed. Marital equity is the portion of the total equity which accrued during the marriage. What I would do is hire a professional appraiser (not a realtor) to give a formal, written appraisal and use that as the basis of equity. Ask your stbx for 1/2 of that value to be written into the agreement. The alternative is to leave it open, in which case you'll never know what you might get and you're at his mercy to sell the place.

The fact that he has use of the home doesn't change things much. I am assuming that he's responsible for the upkeep on the home? If so, he's paying for use of the home. IF you were ordered to leave by the court (rather than leaving voluntarily), you could argue that he should be paying all the expenses, but it's probably a little late for that argument. Furthermore, that argument would open you up for him to claim that he should get more of the equity.

If the home has been unable to sell while listed for sale on the open market at the price listed, I truly have to question that it is "worth" anything more than it's list price. My professional work requires me to handle the sale of many properties on a daily basis, so I am very aware of how one derives the "value" of a given house. And, IMHO, I find that a good Broker Price Opinion is FAR, far more accurate than most of the appraisals I see. Matter of fact, so much so that we no longer use anything BUT BPOS to determine value for our properties, because file appraisals are so "all over the board" and never reflect what we are untimately able to sell these places at. I honestly do NOT have a lot of faith in appraisals because they use OLD values. Brokers know what is selling NOW and for how much, whereas, appraisers can only use what has closed and been posted to the public record.

[mistoffolees]

Originally Posted by nextwife

If the home has been unable to sell while listed for sale on the open market at the price listed, I truly have to question that it is "worth" anything more than it's list price. My professional work requires me to handle the sale of many properties on a daily basis, so I am very aware of how one derives the "value" of a given house. And, IMHO, I find that a good Broker Price Opinion is FAR, far more accurate than most of the appraisals I see. Matter of fact, so much so that we no longer use anything BUT BPOS to determine value for our properties, because file appraisals are so "all over the board" and never reflect what we are untimately able to sell these places at. I honestly do NOT have a lot of faith in appraisals because they use OLD values. Brokers know what is selling NOW and for how much, whereas, appraisers can only use what has closed and been posted to the public record.

That is certainly a legitimate view based on experience. Whether the court will accept a broker valuation is a different story. In any event, OP will need to find a way to value the house that is acceptable to her, her stbx, and the court.

One CAN say, of course, that it's worth less than the asking price since no one has bought it for the asking price.

[nextwife]

Originally Posted by mistoffolees

That is certainly a legitimate view based on experience. Whether the court will accept a broker valuation is a different story. In any event, OP will need to find a way to value the house that is acceptable to her, her stbx, and the court.

One CAN say, of course, that it's worth less than the asking price since no one has bought it for the asking price.

I don't know. Professionally, the PMI companies have been accepting BPOs, rather than appraisals, for claims submission, Deed in Lieu and Short Sale approvals.


From a default real estate standpoint, there is nothing more frustrating than a borrower pushed into default because some court order was created that established some utterly undo-able requirement that a divorced borrower either sell for X or refi ex spouse for X dollars, when the "market" won't allow a lender to value it at X for either purpose. We RE-EVALUATE "old" values on a regular basis because this market is a moving target,. and a 6 month old appraisal may no longer realistically represent what it can NOW be sold for. The problem is that in divorce proceedings, the value in the decree is stagnant, but the marketplace is not.

[mistoffolees]

Originally Posted by nextwife

I don't know. Professionally, the PMI companies have been accepting BPOs, rather than appraisals, for claims submission, Deed in Lieu and Short Sale approvals.


From a default real estate standpoint, there is nothing more frustrating than a borrower pushed into default because some court order was created that established some utterly undo-able requirement that a divorced borrower either sell for X or refi ex spouse for X dollars, when the "market" won't allow a lender to value it at X for either purpose. We RE-EVALUATE "old" values on a regular basis because this market is a moving target,. and a 6 month old appraisal may no longer realistically represent what it can NOW be sold for. The problem is that in divorce proceedings, the value in the decree is stagnant, but the marketplace is not.

It's not a perfect system by any means.

Bottom line, however, is that the person who is NOT keeping the house has a right to free up their credit so they don't spend the next 30 years tied to a house they no longer have any connection to.

For that to happen, one of 2 things has to happen:
1. House refinanced in the name of the person keeping it.
2. House sold

One can quibble all day about what the correct valuation is, but it is necessary do do something and that means that everyone involved has to agree on a valuation. They may accept a broker's evaluation or a formal appraisal, but they have to accept SOMETHING or the person who left the house will be stuck on a mortgage they don't want and can't afford and may not be able to get on with their own life.

Court orders ARE stagnant, but I would argue that overall, that's an advantage rather than a disadvantage. I don't want court orders that change on a daily basis. It simply says that the parties need to be very careful in what they accept as a valuation at the time of the divorce AND THEN MAKE THE TRANSACTION HAPPEN QUICKLY. The 'innocent' party shouldn't be responsible for delays caused by the other party. In this case, the one who kept the house messed around and didn't sell or refinance as required by a court order and then wants to whine about the consequences. I'm not inclined to give him a break - he's had over a year to sell the place.

[nextwife]

Originally Posted by mistoffolees

It's not a perfect system by any means.

Bottom line, however, is that the person who is NOT keeping the house has a right to free up their credit so they don't spend the next 30 years tied to a house they no longer have any connection to.

For that to happen, one of 2 things has to happen:
1. House refinanced in the name of the person keeping it.
2. House sold

One can quibble all day about what the correct valuation is, but it is necessary do do something and that means that everyone involved has to agree on a valuation. They may accept a broker's evaluation or a formal appraisal, but they have to accept SOMETHING or the person who left the house will be stuck on a mortgage they don't want and can't afford and may not be able to get on with their own life.

Court orders ARE stagnant, but I would argue that overall, that's an advantage rather than a disadvantage. I don't want court orders that change on a daily basis. It simply says that the parties need to be very careful in what they accept as a valuation at the time of the divorce AND THEN MAKE THE TRANSACTION HAPPEN QUICKLY. The 'innocent' party shouldn't be responsible for delays caused by the other party. In this case, the one who kept the house messed around and didn't sell or refinance as required by a court order and then wants to whine about the consequences. I'm not inclined to give him a break - he's had over a year to sell the place.

I agree, but if one wants "off" the mortgage, either the refi should be required IMMEDIATELY, or the house placed on the market and sold immediately. And if it is upside down, they'll need to figure ourt how to deal with the shortfall immediately.

I see too many court orders where one spouse simply moved out and away, and the remaining debter, is TRYING to cover the upside down mortgage without help.

IMHO, both should stay put until the debtor is OFF the loan by sale or refi, it shouldn't be the lender's problem that suddenly the coborrowers don't like cohabiting anymore.

[mistoffolees]

Originally Posted by nextwife

I agree, but if one wants "off" the mortgage, either the refi should be required IMMEDIATELY, or the house placed on the market and sold immediately. And if it is upside down, they'll need to figure ourt how to deal with the shortfall immediately.

I see too many court orders where one spouse simply moved out and away, and the remaining debter, is TRYING to cover the upside down mortgage without help.

IMHO, both should stay put until the debtor is OFF the loan by sale or refi, it shouldn't be the lender's problem that suddenly the coborrowers don't like cohabiting anymore.

I agree completely. I've made the same statement wrt QDROs. People who try to half complete the process and then let it sit for a while are making a big mistake. Conditions change. The best result (at least when ALL parties are considered) will be obtained when a decision is made on how to divide assets AND then to immediately take action to enforce the split. Any delay between decision and action can cause problems.

[Bali Hai]

Originally Posted by mistoffolees

I agree completely. I've made the same statement wrt QDROs. People who try to half complete the process and then let it sit for a while are making a big mistake. Conditions change. The best result (at least when ALL parties are considered) will be obtained when a decision is made on how to divide assets AND then to immediately take action to enforce the split. Any delay between decision and action can cause problems.

When doing a QDRO, with accounts invested in risky stocks the parties should agree to split the shares. If the market goes up between the time it's decreed and the QDRO, they both win, if it goes down, they both lose. Completely fair to both parties.

You cannot guarantee no delays in EVERY case. It's impossible.

[mistoffolees]

Originally Posted by Bali Hai

When doing a QDRO, with accounts invested in risky stocks the parties should agree to split the shares. If the market goes up between the time it's decreed and the QDRO, they both win, if it goes down, they both lose. Completely fair to both parties.

You cannot guarantee no delays in EVERY case. It's impossible.

We've been through this before. Maybe if you take your fingers out of your ears....

No one said one could guarantee NO DELAYS. That's your silly straw man argument.

Your suggestion basically doubles transaction fees - which doesn't help anyone. More importantly, yours still creates the potential for someone to get a lousy deal.

One example: I am an aggressive stock investor and invest in some relatively risky stocks. My ex wife is extremely conservative and given the choice would only be in safe mutual funds and bonds.

We divorced in 2007. She got her share of my 401K in cash rolled over to her IRA. She was then free to invest it however she wished - and she mostly invested it conservatively. Her portfolio dropped less during the worst of the recession than I did. Your argument is that even if it took us 2 years for the shares to transfer that it would have been fair for her because she got half of the stock. In reality, it would have been very unfair because she would have suffered with an investment strategy that she didn't choose.

For all the reasons above and which I've explained before, the first priority should be for QDROs to be transferred as quickly as possible. Accepting delays on the basis of your argument that it's OK because the percentage is the same no matter what happens to the shares is just plain wrong.

Beyond that, transferring the shares in cash means that the transaction costs are borne by both parties rather than forcing only the recipient to pay them - and doubly pay them, as well.

[Bali Hai]

Originally Posted by mistoffolees

We've been through this before. Maybe if you take your fingers out of your ears....

No one said one could guarantee NO DELAYS. That's your silly straw man argument.

Call it what you want, it's a VALID argument.

Your suggestion basically doubles transaction fees - which doesn't help anyone. More importantly, yours still creates the potential for someone to get a lousy deal.

One example: I am an aggressive stock investor and invest in some relatively risky stocks. My ex wife is extremely conservative and given the choice would only be in safe mutual funds and bonds.

Well you should have invested her half of your account in safe funds ALL the time during the marriage then!

It's only when your divorcing that you consider her risk tolerance with her half of your account??

We divorced in 2007. She got her share of my 401K in cash rolled over to her IRA. She was then free to invest it however she wished - and she mostly invested it conservatively. Her portfolio dropped less during the worst of the recession than I did. Your argument is that even if it took us 2 years for the shares to transfer that it would have been fair for her because she got half of the stock. In reality, it would have been very unfair because she would have suffered with an investment strategy that she didn't choose.

Tough bananas for her. She would have still gotten half the value of the account and that's FAIR!

For all the reasons above and which I've explained before, the first priority should be for QDROs to be transferred as quickly as possible. Accepting delays on the basis of your argument that it's OK because the percentage is the same no matter what happens to the shares is just plain wrong.

I'm sure YOU think it's wrong from your point of view, but from my point of view, it's RIGHT!

Beyond that, transferring the shares in cash means that the transaction costs are borne by both parties rather than forcing only the recipient to pay them - and doubly pay them, as well.

The recipient should pay any fees associated with the transaction, there is no free lunch!!